Amendments to the Income Tax Law (所得稅法) passed the first reading in the Legislative Yuan on Monday. If they pass the second and third reading, military personnel and public school teachers will lose their tax-exempt status. Although this is an important part of the government's tax reform, it is just the first step toward more fair taxation.
Tax exemptions for military personnel and public school teachers are an anachronism. At one time, their salaries and living conditions were poor, and they were sent to far-flung, remote areas to defend the nation or teach children. Tax exemption was a reasonable way of making up for such hardships.
Today the situation has changed. There are large numbers of unemployed people, while many workers who draw monthly salaries of NT$20,000 to NT$30,000 (US$625 to US$935) have to pay tax on every single dollar they earn. By comparison, public school teachers and military personnel make NT$50,000 to NT$60,000 per month, but don't pay any tax at all.
They also enjoy generous pension packages, and their 18 percent preferential interest rate means that their pensions sometimes are as high as their salaries. This is unreasonable -- and it is hardly surprising that both public opinion and the government feel that this policy needs reforming.
Even after military and civil service personnel and public school teachers start paying income tax, the tax system still won't be equitable. The Ministry of Education and the Ministry of National Defense will direct the tax revenue from military personnel and public school teachers -- approximately NT$15.5 billion -- toward subsidies for teachers and military personnel. None of it will end up in the treasury's coffers. The Ministry of Finance has merely succeeded in expanding the tax base without increasing revenue or establishing a fair system.
Real tax equality should mean that everyone who earns money should pay tax, and those who earn more should pay more. But that is not the case, for the rich enjoy various investment tax breaks, and can afford the services of accountants who help them reduce or evade tax through various loopholes. As a result, the rich pay little or no tax, while the full burden of taxation falls on ordinary salary-earners who have to pay tax on every dollar they earn. The Ministry of Finance is aware of this inequality, and has therefore proposed minimum tax payments. This should be coordinated with various tax incentives, and the policy should be implemented as soon as possible.
The nation's income gap is smaller than that in most advanced nations, but over the last few years it has widened. It is the government's responsibility to make those who are wealthy bear a greater share of the tax burden so that the weak and disadvantaged can be properly cared for. Following the abolition of the tax-exempt status for military personnel and government teachers, further steps must be taken to make sure that rich people, financial groups and other businesses bear a more fair share of the tax burden.
When military personnel and teachers pay income tax, and businesses are required to pay a minimum tax, this will extend the tax base and conform to the principle that everyone should contribute to it. The next step is to better use existing tax brackets to make the rich carry a greater share of the tax burden, relieving the burden on low income households. In this way, through its tax policy, the government will be able to rectify the nation's income gap and look after those most in need of help.
Only then will the government be on the road to achieving its goal of a welfare-based society.
Saudi Arabian largesse is flooding Egypt’s cultural scene, but the reception is mixed. Some welcome new “cooperation” between two regional powerhouses, while others fear a hostile takeover by Riyadh. In Cairo, historically the cultural capital of the Arab world, Egyptian Minister of Culture Nevine al-Kilany recently hosted Saudi Arabian General Entertainment Authority chairman Turki al-Sheikh. The deep-pocketed al-Sheikh has emerged as a Medici-like patron for Egypt’s cultural elite, courted by Cairo’s top talent to produce a slew of forthcoming films. A new three-way agreement between al-Sheikh, Kilany and United Media Services — a multi-media conglomerate linked to state intelligence that owns much of
The US and other countries should take concrete steps to confront the threats from Beijing to avoid war, US Representative Mario Diaz-Balart said in an interview with Voice of America on March 13. The US should use “every diplomatic economic tool at our disposal to treat China as what it is... to avoid war,” Diaz-Balart said. Giving an example of what the US could do, he said that it has to be more aggressive in its military sales to Taiwan. Actions by cross-party US lawmakers in the past few years such as meeting with Taiwanese officials in Washington and Taipei, and
The Republic of China (ROC) on Taiwan has no official diplomatic allies in the EU. With the exception of the Vatican, it has no official allies in Europe at all. This does not prevent the ROC — Taiwan — from having close relations with EU member states and other European countries. The exact nature of the relationship does bear revisiting, if only to clarify what is a very complicated and sensitive idea, the details of which leave considerable room for misunderstanding, misrepresentation and disagreement. Only this week, President Tsai Ing-wen (蔡英文) received members of the European Parliament’s Delegation for Relations
Denmark’s “one China” policy more and more resembles Beijing’s “one China” principle. At least, this is how things appear. In recent interactions with the Danish state, such as applying for residency permits, a Taiwanese’s nationality would be listed as “China.” That designation occurs for a Taiwanese student coming to Denmark or a Danish citizen arriving in Denmark with, for example, their Taiwanese partner. Details of this were published on Sunday in an article in the Danish daily Berlingske written by Alexander Sjoberg and Tobias Reinwald. The pretext for this new practice is that Denmark does not recognize Taiwan as a state under